Murphy USA Inc (MUSA)

Interest coverage

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Earnings before interest and tax (EBIT) US$ in thousands 748,700 833,500 970,000 605,200 559,400
Interest expense US$ in thousands 97,100 98,500 85,300 82,400 51,200
Interest coverage 7.71 8.46 11.37 7.34 10.93

December 31, 2024 calculation

Interest coverage = EBIT ÷ Interest expense
= $748,700K ÷ $97,100K
= 7.71

Murphy USA Inc's interest coverage ratio has shown some fluctuation over the past five years. The ratio was highest in December 31, 2022, at 11.37, indicating the company's ability to comfortably cover its interest expenses with its operating income. However, in the subsequent years, the interest coverage ratio decreased to 7.34 in December 31, 2021, and further declined to 7.71 in December 31, 2024.

While the interest coverage ratio in the remaining years (2020, 2023) was above 8, indicating a healthy ability to cover interest expenses, there was a slight downward trend in recent years. It is worth noting that an interest coverage ratio above 1 is generally considered sufficient, but higher ratios indicate a stronger ability to cover interest payments. Murphy USA Inc should monitor this ratio closely to ensure it remains at a healthy level to meet its debt obligations in the future.